What ARPA Funds Can Be Used On

Using ARPA Funds for Government Services Video (added February 1, 2022)

On January 6, 2022, the U.S. Department of the Treasury released the following: 

The Final Rule provides the rule text and supplemental information. 

The Overview of the Final Rule provides a summary of major rule provisions for informational purposes and is intended as a brief, simplified user guide for recipients and stakeholders. 

The Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule provides guidance on the transition from compliance with the Interim Final Rule to compliance with the Final Rule. 

The Final Rule webinar and slide presentation provide an introduction and summary of the Final Rule.

With the final rule, changes were made to the 6 major categories of eligible uses. The permissible uses categories are 

1. Support the Public health Response,

2. Address Negative Economic Impacts

3. Replace Public Sector Revenue Loss

4. Premium Pay for Essential Workers

5. Water, and Sewer Infrastructure

6. Broadband Infrastructure.

The change that will impact Oklahoma NEU municipalities the most by significantly broadening the permissible uses is under the revenue loss category. Under the revenue loss category standard allowance option, an Oklahoma NEU municipality can use the entire allotment of their ARPA funds for Government services. In order to use the funds for this purpose, In the final rule, recipients will be permitted to elect a fixed amount of loss that can then be used to fund government services. This fixed amount, referred to as the “standard allowance,” is set at $10 million total for the entire period of performance. In other words, the Treasury presumes that up to $10 million in revenue has been lost due to the public health emergency and recipients are permitted to use that amount to fund “government services”. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive: 

✓ Construction of schools and hospitals 
✓ Road building and maintenance, and other infrastructure 
✓ Health services 
✓ General government administration, staff, and administrative facilities 
✓ Environmental remediation 
✓ Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles) 

Government services is the most flexible eligible use category under the SLFRF program, and funds are subject to streamlined reporting and compliance requirements.  

However, recipients should be mindful that payment of debt service, replenishing of financial reserves, deposits into pension funds, and satisfaction of settlements and judgments do not count as government services. For further information on the other restrictions on use, see page 41 of the overview of the final rule.    

If the government service your municipality wants to provide is not listed in the final rule, follow the advice of your municipal attorney in determining whether the service would be a “Government service.” 

If you would like to know what changes were made to the other categories, the National League of Cities put together an article about the 10 Things for City Leaders to know about the Final Rule.   

Christian Rinehart 
Associate General Counsel 
Oklahoma Municipal League